What is the Value of My Home?

We may be asking ourself, “Does my insurance coverage fit my needs?” “Do I have enough coverage to replace my home in the event of a serious loss?” “What affects my premium?”

These questions create a need for us to regularly review our Homeowners insurance and try considering other questions such as: “Have we recently remodeled or improved our home?” “Has the rate of inflation risen since our last appraisal?” “What influences the building construction costs in our area?”

As we consider these issues, it’s important to understand that real estate values measure the market value or selling price for a home. For insurance purposes, it’s important to estimate the current replacement cost, which is the amount needed to hire a contractor to repair the damage or rebuild the home to its pre-loss condition. Dwelling replacement costs used by insurance companies do not include the value of the land. Market conditions in our area may impact the amount it will cost to rebuild our home if you experience a great loss.

Building contractors or professional replacement cost appraisers are a good source for obtaining an estimate replacement cost for our home. Estimates from these sources should reflect our home’s specific features and details. If we’re unable to obtain a detailed estimate from these sources, we can go to our house insurance agent.

Once we know the estimate cost to replace our home, we can decide by how much insurance coverage fits our needs. We should also consider other policy endorsements such as backup of sewer and drain coverage or additional coverage for personal articles with high values such as jewellery, fine arts and collectibles.

We may want to consider higher personal liability coverage, which is provided by a separate policy.

Finally, remember to periodically review our insurance coverages to ensure that we have the coverage that we personally need and to our family.